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This guide shows you how to set up withholding tax (WHT) in DualEntry: add the withholding rates you use, then set each vendor’s withholding defaults. After completing these steps, new bills and direct expenses for the vendor fill in the vendor’s withholding category on each line and calculate the withheld amount. For how withholding tax is calculated and posted, see Withholding Tax.

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Prerequisites

Confirm the following before you start:
  • Company address: The company you withhold tax for has an address with a country. DualEntry uses the company’s country to decide which rates apply to its records.
  • Liability account: You have a liability account for withheld tax, of type Other Current Liability or Long Term Liability. If you don’t have one, create it in your chart of accounts.
  • Tax agency vendor: The tax authority you pay withheld tax to exists as a vendor with Type set to Tax Agency.
  • Permissions: You have the tax permission to create withholding rates, and permission to edit vendors.

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Add a withholding rate

A withholding rate is the percentage you withhold for one category of payment in one country. Add one rate for each category you withhold, for example one rate for professional fees and another for rent. If you have companies in more than one country, add each country’s rates separately.
  1. Navigate to Configuration → Tax Setup → Withholding Rates.
  2. Select New Withholding Rate.
  3. In Country, select the country the rate belongs to. It must match the country of the company that uses it.
  4. In Category, enter the name you want to see on bill lines, for example a section code such as 194J or a description such as Professional fees.
  5. In Rate Percentage, enter the rate as a percentage, for example 10 for 10%. You can enter up to four decimal places, and the rate can’t be more than 100%.
  6. In Effective Start Date, enter the first date the rate applies. Optionally, enter an Effective End Date, which must be on or after the start date.
  7. Optionally, add a Description.
  8. Select Create.
The rate appears in the list with its Country, Category, Rate, Valid From, and Valid To dates. You can’t create two rates with the same country, category, and effective start date.

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Change or retire a withholding rate

After you create a rate, its category, country, percentage, and effective start date can’t be changed. This keeps the rate on posted records accurate. To edit a rate, open it in the list and select Edit. You can change its Description, Effective End Date, and Status, then select Update. On system rates, the Description can’t be changed. When a rate changes, set an Effective End Date on the old rate and add a new rate with the new percentage and an Effective Start Date for the day after. To stop using a rate, set its Status to Inactive. Records already saved with a rate keep it after the rate ends or is deactivated, including draft records. New records and records whose date or company you change only accept rates that are active and valid on the record date. If you change the date of a draft bill and its rate isn’t valid on the new date, select a valid rate before you save. Ending or deactivating a rate doesn’t change the withheld amounts on posted records or on remittances.

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Set a vendor’s withholding defaults

Vendor defaults fill in the withholding category and payable account on new bills and direct expenses for the vendor, so you don’t pick them each time.
  1. Open the vendor and select Edit.
  2. In the Withholding Tax section, turn on Withholding tax applicable.
  3. In Default withholding category, select the rate to apply. Default rate shows its percentage.
  4. In Default withholding payable account, select the liability account for the withheld tax.
  5. In Tax agency, select the vendor you pay the withheld tax to. Only vendors of type Tax Agency appear.
  6. Save the vendor.
The Withholding Tax section doesn’t appear on intercompany vendors or on vendors of type Tax Agency. A vendor can’t be its own tax agency. While other vendors or withholding remittances use a vendor as their tax agency, you can’t change that vendor’s Type. When you turn off Withholding tax applicable, DualEntry clears the vendor’s defaults. Existing records keep their withholding tax, and you can still add a withholding category to a line by hand.

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Troubleshooting

These are the most common messages when you set up withholding tax:
  • Withholding tax agency must be a vendor of type Tax agency: The vendor selected in Tax agency isn’t a tax agency. Set that vendor’s Type to Tax Agency, or select a different vendor.
  • The default category doesn’t fill in on a new bill: The vendor’s default rate fills in only when Withholding tax applicable is on and the rate’s country matches the company’s country. Check the vendor’s Withholding Tax section and the rate’s Country. An inactive or expired default rate still fills in, but the line shows an error.
  • The withholding category is not for the country of the company.: A bill or direct expense line has a rate from another country. Select a rate for the company’s country.
  • The payable account isn’t listed: The account isn’t a liability account. Use an account of type Other Current Liability or Long Term Liability.

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Next steps

Last modified on November 10, 2026